- Fire At UK-France Subsea Power Cable Could Trigger Winter Blackouts
Fire At UK-France Subsea Power Cable Could Trigger Winter Blackouts
A fire in a subsea cable has dramatically reduced power imports from France until March, U.K.’s National Grid Plc said, deepening the energy crisis that threatens winter blackouts for millions.
The timing couldn’t be worse. Before the fire, the U.K. was already experiencing a five-year low in spare winter capacity. Compound this with gas shortages and the lack of renewable energy sources, sending power prices on a record-breaking run. The country may experience grid chaos in the coming months.
“If we don’t start to remedy the situation, we are going to be facing blackouts this winter,” Catherine Newman, chief executive officer of Limejump Ltd., a unit of Royal Dutch Shell Plc, told Bloomberg on Thursday. “If things don’t start to reverse soon, we will see the industry getting turned off across the board.”
“If anything goes wrong, we might not have anything left in the back pocket,” said Tom Edwards, a consultant at Cornwall Insight Ltd., an adviser to the government and utilities. “If a nuke trips offline or something else big, that could cause issues because we might not have anything to replace it.”
Britain receives power via six subsea cables, and two of them are connected to France’s power grids of more than 56 nuclear power plants.
The cable’s total capacity will be shut off until March 2022. The shortage is expected to exacerbate power price volatility when peak demand is seen in the winter months.
“The outage is going to lift the potential for price volatility as long as its offline,” said Glenn Rickson, head of power analysis at S&P Global Platts.
The compounding energy crunch is fueling concerns about inflation when the economy is still recovering from the pandemic.
The subsea cable interruption doesn’t mean blackouts will be seen in the immediate future. Still, as power demand increases as temperatures turn cooler, demand will spike and strain the grid.
The energy crunch has already forced two fertilizer plants in the country to shutter operations on Wednesday. C.F. Industries Holdings Inc halted its Billingham and Ince manufacturing facilities “due to high natural gas prices.
The broader issue is that economic impacts due to an unstable power grid could hinder economic development this winter.
It’s only a matter of time before U.K. politicians take action to shield consumers from high energy prices.
Tyler Durden
Fri, 09/17/2021 – 02:45 - The Major Beneficiary Of The Afghanistan Crisis
The Major Beneficiary Of The Afghanistan Crisis
Assertive Foreign Policy proves Costly
It is clear that the post-Cold War order is shifting. The costly wars of Afghanistan and Iraq are calling into question the pre-eminence of the United States in international security affairs. Russia shows no fear to act outside its borders and China is in a good position to become the world’s largest economy. Turkey’s president, Recep Tayyip Erdogan, eyes an opportunity to cement his grip on power by transforming Turkey into a key regional player in the emerging multipolar system.
The instability following the Arab Spring in 2011 provided Erdogan with a regional environment where he could tap into Turkish nationalist sentiments and shore up his domestic political standing. Following his intervention in northeastern Syria, Erdogan successfully negotiated an agreement with Russia on removing Kurdish fighters along the southern Turkish border. Similarly, in Libya, Ankara became a key mediator by facilitating a long-term peace settlement with Moscow. Turning to the issue of Cypriot energy resources, the Turkish backing of the UN-sanctioned Government of National Accord (GNA) in Tripoli placed Ankara in a strong position to determine maritime boundary demarcation.
However, while securing geopolitical gains, Turkey’s assertive maneuvers have put it at risk of isolation. A regional group led by Saudi Arabia and the United Arab Emirates (UAE) has also been competing for influence since the 2011 uprisings. With Turkey breaking off diplomatic relations with Egypt after Abdel Fattah el-Sisi removed Mohammed Morsi in 2013, Ankara and the Saudi-Emirati-led bloc have been locked in a rivalry. Tensions have since escalated following Turkey’s backing of Qatar in the Gulf dispute and its intervention in Libya. As for the West, Turkish involvement in the conflict in Syria led to a deterioration in relations with the US while the issue over Cyprus resulted in EU sanctions.
Afghanistan Crisis offers a New Strategic Opportunity for Erdogan
Despite the risk of isolation causing problems for Erdogan, the crisis in Afghanistan adds a new regional dynamic where Ankara may acquire leverage.
The decision to maintain Turkey’s diplomatic presence in Afghanistan enables Erdogan to address US security concerns. Following the NATO summit this year, the respective Turkish and US defense ministries held positive talks on securing Hamid Karzai International Airport following the US withdrawal. Erdogan’s initiative to discuss with the Taliban the future security of the airport represents a significant step towards mending Turkish-US relations. In holding such talks, Turkey is in a position to facilitate the objective of the Biden administration to ensure that the supply of humanitarian aid to Afghanistan remains.
Turkey’s continued commitment in Afghanistan also allows Ankara the chance to revive the important role it plays with the European Union. Ankara has been a key partner for Brussels in the management of irregular migration into Europe. Despite recent tensions, the risk of a refugee influx as a result of the Afghan crisis means that Brussels is under pressure to revisit its 2016 agreement on migration with Ankara. Taking full advantage of this, Erdogan warned the EU in a televised address that his country has ‘no duty, responsibility, or obligation to be Europe’s refugee house.’
In the Middle East, Iran’s influence puts Ankara in a good position to reduce tensions. Tehran made moves to step up its presence in Afghanistan prior to the NATO withdrawal in August. This comes amid the Gulf states’ efforts to alleviate tensions with the Islamic Republic. The Gulf Cooperation Council lifted the blockade on Qatar, which served to heal the rift in relations as a result of the UAE-Israel agreement. Since the Biden administration plans to restore the Iran nuclear deal, Saudi Arabia hopes that this soft stance will fuel positive relations with Washington. Meanwhile, Riyadh may have to look to Turkey to counter Iran in Afghanistan.
Can Turkey Maintain Regional Influence without Causing Tensions?
Turkey is facing the risk of isolation. Relations between Ankara and the regional bloc under Saudi Arabia and the UAE have struggled to advance positively since the Arab Spring. Although Erdogan’s assertive foreign policy in Libya and in Syria shored up his domestic political standing, it has alienated Riyadh and Abu Dhabi. Turkish unilateralism abroad has also led to a rift in its relationships with Washington and Brussels.
Nonetheless, the crisis in Afghanistan has forced a geopolitical recalculation that heightens Turkey’s strategic regional importance. The continuation of a Turkish diplomatic presence in Afghanistan means that it would be in EU and US interests to work with Ankara to stabilize the region. Despite the purchase of an S-400 missile system from Russia remaining a source of tension in US-Turkey relations, Washington may welcome Turkey’s stabilizing role in Afghanistan. Moreover, Turkish coordination of efforts on the crisis with Pakistan means that Ankara plays a key role in responding to Chinese influence in Central Asia. The EU, for its part, views the involvement of third countries, primarily Turkey, as key to regional security.
As for the Gulf states, the challenge Iran poses in Afghanistan means that Turkey is well-placed to improve its relationship with Saudi Arabia. Despite the risk of further isolation as a result of Turkish engagement with the Taliban, the current political environment in the region favors a reset. The end to the blockade on Qatar removes a key barrier to rebuilding Turkish-Saudi relations. Riyadh’s ally, Egypt, has also expressed a willingness to reach a compromise with Turkey over gas quotas in the Eastern Mediterranean. Lastly, in the summer, the UAE made moves to re-engage with Turkey after its economy took a hit as a result of the Covid-19 pandemic.
The question is whether Erdogan can build on these efforts to normalize relations with the West and the Gulf. With the situation in Afghanistan deteriorating, the Turkish president is in a strong position to do so.
Tyler Durden
Fri, 09/17/2021 – 02:00 - The New Federalist Party: Biden Move Forward With The Greatest Federalization Push Since Adams
The New Federalist Party: Biden Move Forward With The Greatest Federalization Push Since Adams
President Joe Biden has long pledged to “build back better” but in the last few months it has become clear that his transformative plans go beyond mere infrastructure and extend to our very structure of government.
From abortions to elections to rents, Biden is seeking to federalize huge areas to displace state law.
Not since John Adams and his Federalist Party has the country faced such a fundamental challenge to our system of federalism.
Some of the claims made by Biden recently would make even Adams blush.
What is most striking about these claims is that Biden and his aides have indicated that they know they are operating outside of constitutional limits.
Take the recent controversy over the vaccine mandate. Biden and aides like chief of staff Ronald Klain claimed before the inauguration that he would impose national mandates in the pandemic, only to be told that a president lacks such authority over the states. Biden, Speaker Nancy Pelosi, D-Calif., and other Democratic leaders then denied that they would impose such mandates, often acknowledging the constitutional limits placed on presidents.
Then came last week, when Biden suddenly announced that he would impose a national vaccine mandate through the Occupational Safety and Health Administration (OSHA). Klain admitted that the OSHA rule was a mere “workaround” of the constitutional limit imposed on the federal government. White House press secretary Jen Psaki preferred to call it a “pathway” after admitting “we do not have the power to inform each American you need to be vaccinated.”
Whether a “workaround” or a “pathway,” the move would allow the federal government to dictate public health measures in every state – a claim that will face major federalism challenges in court.
Under this interpretation, OSHA could impose a federal mandate for any measure that impacts workers, including public health measures not directly linked to a given workplace or job. That may be more of a sticker shock for some on the federal bench, including some justices.
The move came on the same day Attorney General Merrick Garland announced an equally sweeping claim of federal jurisdiction over abortion rights in challenging the Texas law.
Garland announced that the federal government would appear in court not as an amicus (or friend of the court), as has been its practice in past cases. Instead, it will sue directly as a party in interest because the law is viewed as countermanding a constitutional right. Indeed, Garland claimed such authority in defense of any constitutional right that could be abridged by any state law.
In his remarks, Garland indicated that the government would claim federal preemption in whole or in part over the abortion area. That is another sweeping claim that could make many judges uneasy. The Supreme Court has always recognized state authority in this area. The question is where to draw the line. The filing will add a new basis for pro-life challenges based on federalization.
The filing against the Texas law followed a call from Biden for a “whole of government response” that was obviously directed at the Justice Department. It is not the first pressure exerted by the White House on agencies for such legal claims.
The Democratic Party has now emerged as the new Federalist Party and Biden is seeking to outdo John Adams in supplanting state authority.
Previously, Biden called for the Centers for Disease Control and Prevention (CDC) to impose a nationwide moratorium on the eviction of renters. Biden admitted that his White House counsel and their preferred legal experts told him that the move was likely unconstitutional. Despite that overwhelming opinion, he listened to Professor Laurence Tribe at the urging of Pelosi. Despite the pledge to return to a respect for the “rule of law,” Biden openly suggested that they could use the litigation to get as much money out of the door as possible before being barred by the courts. They lost in court, as many of us predicted, but Biden wanted this small agency to effectively dictate rental payments across the country.
These moves follow new evidence that the Biden administration had concluded that a farm debt law was unconstitutional before putting it into the pandemic relief bill.
There has been little media attention to the impressive litany of losses of the Biden administration in court or the open pressure by the White House on these agencies. The media covered such pressure extensively during the Trump administration and legal experts objected that the Trump White House was attacking the independence of the Justice Department and other agencies.
In these measures, Biden is demanding dubious federal actions that are being promptly taken by his agency heads with poor outcomes for the executive branch.
The move on abortion is particularly reckless.
The Texas law is already being challenged so there is no need for a federal action. However, the White House wanted such a filing for political reasons and Garland relented. In so doing, he risked potentially damaging new precedent on federal jurisdiction in a lawsuit that is redundant and unnecessary.
Roughly 200 years ago, the Federalist Party faded from political dominance in the United States and, with it, his vision for a dominant federal government. The Democratic Party has now emerged as the new Federalist Party and Biden is seeking to outdo Adams in supplanting state authority. It is not an act of building back as much as breaking down a system designed to protect liberty by preventing the concentration of authority in our government.
The question now is whether this “workaround” the Constitution will actually work with the courts.
Tyler Durden
Thu, 09/16/2021 – 23:50 - Climate-Crusading Billionaires To Take Their Private Jets To Davos Again Next Year
Climate-Crusading Billionaires To Take Their Private Jets To Davos Again Next Year
There is light at the end of the covid tunnel, at least according to the Davos billionaire crowd who after two years of missing their favorite World Economic Forum conclave where they get to bash things like wealth inequality and climate change shortly after landing in their private jets, are set to return to the ritzy Swiss ski resort in 2022. The 2021 WEF edition was envisioned for August in Singapore, but a resurgence of the pandemic forced the organization to call off the event.
The in-person event is scheduled for Jan. 17-21 and designed “to address economic, environmental, political and social fault lines exacerbated by the pandemic,” the group said on Thursday. It is working with the Swiss government and health experts to establish the appropriate safety measures, however the mere fact that the meeting is already scheduled means that the world’s most important decisionmakers have already decided that Covid will not be a “thing” going into 2022.
The @wef Annual Meeting in Davos-Klosters, Switzerland, will take place next year from 17-21 January 2022.
Read more here: https://t.co/qssaPX9lHw#wef22 pic.twitter.com/UGmCw4vSzG
— World Economic Forum (@wef) September 16, 2021
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The exclusive Alpine ski resort of Davos, in southeastern Switzerland, had hosted every annual event bar one since the first edition in 1971. It was held in New York in 2002 to show solidarity for the victims of the 9/11 terrorist attack. The annual meeting netted the Swiss economy around CHF80 million ($87 million) in 2020, with businesses and hotels taking in some CHF63 million in revenues, according to Swissinfo.ch.
“The pandemic has brought far-reaching changes. In a world full of uncertainty and tension, personal dialogue is more important than ever. Leaders have an obligation to work together and rebuild trust, increase global cooperation and work towards sustainable, bold solutions,” WEF founder Klaus Schwab stated.
As a reminder, Klaus Schwab is best known for recently officially coining the “Great Reset” term as a description of the current, fourth industrial revolution would “lead to a fusion of our physical, digital and biological identity,” which in his book he clarifies is implantable microchips that can read your thoughts.
Schwab has said that his book, ‘Shaping the Future of The Fourth Industrial Revolution’, was particularly popular in China, South Korea and Japan, with the South Korean military alone purchasing 16,000 copies.
In the book, Schwab explains with excitement how upcoming technology will allow authorities to “intrude into the hitherto private space of our minds, reading our thoughts and influencing our behavior.”
He goes on to predict that this will provide an incentive for law enforcement to implement Minority Report-style pre-crime programs.
“As capabilities in this area improve, the temptation for law enforcement agencies and courts to use techniques to determine the likelihood of criminal activity, assess guilt or even possibly retrieve memories directly from people’s brains will increase,” writes Schwab. “Even crossing a national border might one day involve a detailed brain scan to assess an individual’s security risk.”
Schwab also waxes lyrical about the transhumanist utopian dream shared by all elitists which will ultimately lead to the creation of human cyborgs.
“Fourth Industrial Revolution technologies will not stop at becoming part of the physical world around us—they will become part of us,” writes Schwab.
“Indeed, some of us already feel that our smartphones have become an extension of ourselves. Today’s external devices—from wearable computers to virtual reality headsets—will almost certainly become implantable in our bodies and brains.”
Schwab also openly endorses something the media still claims is solely a domain of discussion for conspiracy theorists, namely “active implantable microchips that break the skin barrier of our bodies.”
The globalist hails the arrival of “implanted devices (that) will likely also help to communicate thoughts normally expressed verbally through a ‘built-in’ smartphone, and potentially unexpressed thoughts or moods by reading brain waves and other signals.”
So in other words, the “fusion of our physical, digital and biological identity” relates to the transhumanist singularity and a future where people have their every movement tracked and every thought read by an implantable microchip.
Tyler Durden
Thu, 09/16/2021 – 23:30 - Bin Laden's Former Right-Hand Man Has Resurfaced. Does It Matter?
Bin Laden’s Former Right-Hand Man Has Resurfaced. Does It Matter?
Authored by Ken Silva via The Epoch Times,
A recently released video suggests that al-Qaeda leader Ayman al-Zawahiri may still be alive.
Some national security experts have downplayed that development due to Zawahiri’s apparent lack of charisma and leadership abilities; others have pointed out that al-Qaeda has flourished – even garnering U.S. support in some conflicts – over the past decade under Osama bin Laden’s former chief lieutenant.
Following bin Laden’s death in 2011, many celebrated the occasion as a win on two fronts: Not only did the United States bring bin Laden to justice, it also delivered al-Qaeda to the seemingly less effective Zawahiri.
A Rand Corporation analysis from Sept. 11, 2001, explains that line of thinking, positing that U.S. officials have made Zawahiri a low priority due to his ineptitude.
“The U.S. government has been relatively blasé about al-Qaeda since Zawahiri took over in 2011,” analysts Colin P. Clarke and Asfandyar Mir wrote for Rand in 2020.
“Some terrorism analysts even claim a living Zawahiri has done more harm to al-Qaeda than a dead one ever could.”
Similar sentiments were expressed following the Sept. 11 release of a video featuring Zawahiri—a video that disproves reports from 2020 that the al-Qaeda chief was dead.
“I bet you a large sum of money that Zawahiri’s outdated recording has been watched and engaged by more Jihadism watchers than by jihadis and sympathizers,” said journalist Hassan I. Hassan, who inaccurately reported Zawahiri’s death in November 2020.
“Takeaways from al-Qaeda’s al-Sahab release today: … Zawahiri is still deadly boring,” Middle East Institute senior fellow Charles Lister wrote.
“Beyond that, not much else of note—AQC remains peripheral to AQ globally.”
But despite Zawahiri’s seeming lack of charisma, others have argued that he has been an effective killer with the blood of thousands—including the victims of 9/11—on his hands. In their analysis for Rand in September 2020, Clarke and Mir also explained how the 70-year-old Egyptian helped al-Qaeda survive throughout the past decade, as the United States focused on other groups such as ISIS.
“Zawahiri, for example, is averse to state-building—a stance that shielded al-Qaeda and provided the group with relative respite as the Islamic State became a more immediate target of U.S. counterterrorism efforts,” they wrote.
“As U.S. strikes against the Islamic State intensified, the cohesion of al-Qaeda’s affiliates and its allies improved.”
Not only has Zawahiri’s relatively low profile helped al-Qaeda evade destruction, but the United States has even lent help to so-called moderate Zawahiri loyalists in Syria and Yemen.
In Syria, the Obama administration funneled arms starting in 2012 to al-Qaeda affiliate Jabhat al-Nusra in support of the failed attempt to oust the country’s president, Bashar al-Assad.
That support prompted then-Secretary of State Hillary Clinton to ponder during a 2012 interview with a CBS News reporter: “We know al-Qaeda—Zawahiri—is supporting the opposition in Syria. Are we supporting al-Qaeda in Syria?”
A Somali security soldier points his weapon at a poster bearing a photo of al-Qaeda leader Ayman al-Zawahiri during an anti-al-Shabab rally in Mogadishu, Somalia, on Feb. 23, 2014. (Abdifitah Hashi Nor/AFP via Getty Images)
A 2015 article in Foreign Affairs—the publication of the Council on Foreign Relations—made the case for why the United States should back al-Qaeda.
“The instability in the Middle East following the Arab revolutions and the meteoric rise of the Islamic State of Iraq and al-Sham (ISIS) require that Washington rethink its policy toward al-Qaeda, particularly its targeting of Zawahiri,” the Foreign Affairs article “Accepting al-Qaeda” reads.
“Destabilizing al-Qaeda at this time may in fact work against U.S. efforts to defeat ISIS.”
However, AntiWar.com editorial director Scott Horton argues that support for Zawahiri loyalists is treasonous, and has contributed toward the continued instability in the region.
“Many of these same [Zawahiri loyalists] had helped the Sunni-based insurgency kill 4,000 out of the 4,500 U.S. troops who died in Iraq War II,” Horton wrote in his 2021 book “Enough Already: Time to End the War on Terrorism.”
Horton also dismissed the argument that al-Qaeda is preferable to ISIS.
“Tell that to the survivors of the thousands of American civilian and military victims murdered by these terrorists in the last 30 years,” he wrote.
Horton noted that U.S. support for al-Qaeda fighters continues to this day because the country is selling weapons to Saudi Arabia, which, in turn, is arming al-Qaeda in the Arabian Peninsula (AQAP) in the ongoing Yemeni civil war.
“In a very real sense, Presidents Obama and Trump [and now Biden] have again put the U.S. Army, Air Force, Navy, and special operations forces at war in the service of al-Qaeda leader Ayman al-Zawahiri,” Horton wrote in “Enough Already.”
Officials are speculating where Zawahiri may be now.
George McMillan, a security contractor who worked on intelligence and surveillance issues in Afghanistan, told The Epoch Times that Zawahiri is likely hiding in western Pakistan—an assessment shared by many national security experts. McMillan explained that Pakistan’s intelligence agency, ISI, has long provided refuge to jihadists in an attempt to court them as allies against India.
“Zawahiri probably still plays a figurehead role in that,” McMillan said.
In recent weeks, Zawahiri may have slipped into Afghanistan in the wake of the United States’ withdrawal, according to former CIA Acting Director Michael Morrell.
“We think so, which means that the Taliban is harboring Zawahiri today,” Morrell said on Sept. 12 in response to a question on CBS’s “Face the Nation.”
“The Taliban is harboring al-Qaeda today. And I think that’s a very important point.”
Horton said he thinks it’s disingenuous that U.S. officials are lamenting the Taliban’s tolerance of al-Qaeda veterans when they still support Zawahiri loyalists in Yemen.
“I don’t [want to] hear about ‘safe havens’ [in Afghanistan] from people who back al-Qaeda terrorists in Yemen and Syria,” Horton told The Epoch Times in a July interview.
The FBI has had Zawahiri on its most-wanted list since he was indicted for his alleged role in the Aug. 7, 1998, bombings of the U.S. Embassies in Dar es Salaam, Tanzania, and Nairobi, Kenya—offering up to $25 million for information that leads to the terrorist leader’s apprehension.
The FBI declined to comment when contacted by The Epoch Times about Zawahiri’s apparent reemergence.
Tyler Durden
Thu, 09/16/2021 – 23:10 - China Applies To Join CPTPP Trade Pact – Boasts Its Leadership Will Leave US "Increasingly Isolated"
China Applies To Join CPTPP Trade Pact – Boasts Its Leadership Will Leave US “Increasingly Isolated”
In a hugely symbolic move sure to have lasting consequences for any future Washington efforts to isolate Beijing, China has filed an application to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the country’s commerce ministry announced Thursday.
The Pacific trade pact involves Japan, Australia, Malaysia, New Zealand and others among 11 total countries, which began in 2018 – though previous to that it was known as the Trans-Pacific Partnership (TPP) and ironically was long deemed a crucial economic counterweight to China’s regional influence. Britain is currently also in negotiations to joint by the end of 2022, London confirmed this summer.
Image source: Reuters During the Obama administration, the US had framed it as a trade bloc for countering China’s influence, arguing that the US should be the spearhead of regional rules of trade. Trump had later pulled out of the deal in 2017. The CPTPP subsequently replaced the TPP, with Japan leading the revised pact.
Without doubt some US officials and Congressional China hawks are expected to push back with regional allies against the prospect of China’s joining. Reuters and Bloomberg confirmed the application on Thursday, detailing that “China submitted the formal application letter to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) to New Zealand, according to a statement late on Thursday (Spet 16) in Beijing.”
China state-run media hailed the application as affirming China’s leading role in global trade and success in resisting Washington pressures. For example Communist Party mouthpiece Global Times had this to say in a Thursday op-ed just hours after the announcement:
The late-night announcement aims to cement China’s leadership role in global trade, while piling pressure on the US that has thus far stayed away from rejoining the revised version of the Trans-Pacific Partnership (TPP), a regional trade pact initiated by the US under former President Barack Obama that was widely believed to be aimed at containing China’s rise, experts said.
GT took further swipes, suggesting China represents multilateralism in the face of Washington bullying as follows:
China is hoping for the CPTPP to put global trade and economic cooperation back on track, underscoring the need for multilateralism, thereby reviving both the Chinese economy and the global economy in the post-COVID-19 era.
More importantly, watchers of international affairs stressed that China’s latest step that is set to steady its partnership with CPTPP members, would inevitably subject the US to what could be overwhelming pressure.
Meanwhile, Beijing continues to denounce those in the West who seek “ideological confrontation”…
All strategies for the Asia-Pacific region should be open and inclusive, while any action stressing ideological confrontation or forming cliques is doomed to fail, China’s mission to the EU replied on Thu to EU’s newly released Indo-Pacific strategy. pic.twitter.com/lkcC57rkLP
— Global Times (@globaltimesnews) September 16, 2021
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Further the official publication said, “The US’ changed course on trade policy has remained in place even after Trump’s successor Joe Biden broke with Trump’s unruly go-it-alone mentality in foreign policy, rejoining the Paris climate change agreement and becoming a member of the World Health Organization once again.”
Among the major hurdles in entry negotiations will include the ongoing China-Australia trade dispute which has seen aggressive China-leveled tariffs effectively block billions of dollars in Aussie exports to its number one trading partner, a devastating blow to Australian industries including wine-producers, meat, barely and other commodities.
Tyler Durden
Thu, 09/16/2021 – 22:50 - Could Biden Nominate Anti-Gun Activist David Chipman As "Gun Czar"?
Could Biden Nominate Anti-Gun Activist David Chipman As “Gun Czar”?
Op-Ed via The Machine Gun Nest (TMGN).
After months of languishing in congressional limbo, the Biden Administration rescinded David Chipman’s nomination to head the ATF. Gun Rights groups jumped to claim victory, and rightly so. David Chipman was a particularly divisive nominee, one with explicit biases. It was clear that given the position to head the ATF, he would do everything in his power to strip Americans of their 2nd amendment right to own a firearm.
The Anti-gun lobby responded with their usual callout of average American gun owners as a “vocal minority” (untrue). The corporate media printed headlines, declaring that Biden had suffered the most high-profile defeat of his presidency so far with David Chipman’s nomination.
Gun owners have reason to celebrate. But they should not get complacent. We have most certainly not seen the last of David Chipman. If Angus King and other moderate Democrats’ latest statements on the issue are anything to go by, we may have another ATF nominee from the Biden Admin coming shortly.
King said that he “unequivocally” wants to see a permanent head lead the agency.
Jon Tester of Montana also was quoted recently as saying there “absolutely” needs to be an ATF director.
Several other Democrats have also said they’d like to see the White House put forth another nominee.
On top of that, David Chipman will likely land a position in the White House. Biden may create a “Gun Czar” or “Office of Gun Violence Prevention” job for him.
Earlier this year, we saw a similar situation where Neera Tanden was nominated to become Biden’s budget director (a cabinet position). Still, hostile tweets directed at members of congress killed her nomination. After the dust settled, she landed a senior advisor position in the White House two months later.
Gun owners should expect to see a similar situation with Chipman. It’s unlikely that the Biden admin will just let this defeat go. Anti-gun activists are upset and will likely start to put pressure on Biden to bypass congress, create a position for David Chipman, and nominate another ATF director.
Expect Chipman to receive his appointment during a holiday, or when some major event has happened that captures media attention.
We could potentially see a situation where an associate of Chipman (someone less controversial) is nominated, and Chipman is given a position in the White House setting policy.
Sound crazy? I wouldn’t put it past the Biden Administration to find a way to get Chipman in position. Their gun control policies have been pulled from the David Chipman playbook, which you can read here.
Don’t forget, the goal of the Anti-Gun lobby is to disarm all American citizens. This is just a bump in the road for them. Gun owners should continue to be vigilant and prepare for the battles to come.
Tyler Durden
Thu, 09/16/2021 – 22:30 - F-35 Stealth Jet At Risk Of Falling Behind China And Russia Defenses, Panel Says
F-35 Stealth Jet At Risk Of Falling Behind China And Russia Defenses, Panel Says
The House Armed Services Committee warned that Lockheed Martin Corp.’s F-35 Lightning II stealth fighter jet, the world’s most expensive weapons system, may underperform against Chinese and Russian air defense systems, according to Bloomberg. The panel also pointed out the fighter’s exorbitant program costs.
The defense committee called into question “overly aggressive development and production schedules” that for more than two decades have resulted “in longer schedules and much higher costs than planned to realize less than full warfighting capabilities required by the Department of Defense.”
It said adversaries pose “near-peer” challenges that could threaten the F-35s existence on the modern battlefield. It warned it’s “uncertain as to whether or not the F-35 aircraft can sufficiently evolve to meet the future expected threat in certain geographical areas of operations in which combat operations could occur.”
No adversaries were named, but we’re assuming the committee is pointing to China and Russia as they quickly advance radar systems, fifth-generation fighter jets, and hypersonic weapons.
The committee also expressed that the F-35 has yet to prove dominance against simulated Russian and Chinese air defense systems. The simulation has yet to be completed and was delayed last December, initially planned for 2017.
We pointed out the stealth jet has 871 software and hardware flaws that could affect combat operations. Ten out of those issues are considered potentially serious issues.
Even though the F-35 is wired with problems, the committee continues to support the nearly $400 billion acquisition program in its latest version of the fiscal 2022 defense policy bill. Taxpayers can expect to pay upwards of $1.5 trillion over the plane’s total lifetime (through 2070).
Norm Singleton via The Mises Institute called the F-35 program a terrible investment as it makes “America less safe by spending us into bankruptcy:”
The F-35 program is expected to cost well over $1 trillion when it is fully operational and deployed. That massive investment will serve to enrich government contractors while giving interventionist politicians an offensive weapon of war. This program was created as a “too big to fail” scheme where once the government starts the process of making these fighter jets, they will have spent so much money that they can’t back away. The F-35 program is a bad deal for the taxpayer while promoting a policy that will make these same taxpayers less safe.
The main takeaway is that America’s global air dominance is whittling away due to bad investments.
Tyler Durden
Thu, 09/16/2021 – 22:10 - Enraged Evergrande Investors Go Full Pitchfork, Hold Management Hostage In Company Offices
Enraged Evergrande Investors Go Full Pitchfork, Hold Management Hostage In Company Offices
As the collapse of Evergrande reverberates throughout the Chinese economy, pissed off retail investors have gone from storming the company’s headquarters to taking management hostage, according to the Straits Times, citing posts ‘making the rounds’ on social media.
What we know so far: over 70,000 retail investors forked over vast sums of money, in some cases their entire life savings, after the country’s second largest, ‘too big to fail’ property developer wooed them with promises of 10%+ annual returns. And while the company most likely is TBTF (as you can read in gory detail here, although Beijing has yet to make an official proclamation), these anxious retail investors may be in more of an “Alive” situation than a Sully Sullenberger landing when it comes to resolving this mess.
“Alive” (1993) After accumulating some 1.97 trillion yuan (US$410 billion) in liabilities, the company – which became the country’s largest high-yield dollar bond issuer (16% of all outstanding notes) – sparked protests across the country earlier this week after announcing they were forced to delay payments on up to 40 billion yuan in wealth management products.
As we noted earlier Thursday, in an effort to appease its angry (and very soon, poor) stakeholders, Evergrande plans to let consumers and staff bid on discounted apartments this month as compensation for billions in overdue investment products as the embattled developer seeks to preserve cash, according to people familiar with the matter.
According to Bloomberg, the company will organize an online property event by Sept. 30 for investors who opt for real estate in lieu of cash. The world’s most-indebted property developer is pushing the discounted real estate as the preferred of three options for angry investors seeking repayments.
The plan, it would appear, did not go off quite as planned: in response, nearly 100 investors stormed Evergrande’s headquarters to demand their money back.
And while we believe Evergrande’s chaotic, freefall default poses such a catastrophic risk to the Chinese economy (a nightmare scenario echoed in graphic detail by Bloomberg) that a rescue will materialize, enraged retail investors now squatting at the company’s headquarters claim to be holding management hostage in their offices, according to the Straits Times.
“I have with me Nanchang’s top Evergrande representative surnamed Chen,” said WeChat user Yang Qiwen, referring to the city in Jiangxi province in south-eastern China, in a post accompanied by a photo of a man lying on the floor.
“He can’t leave the office. There are more than 300 of us (investors) stopping him,” Yang added on one of at least three WeChat groups discussing the company’s dire straits.
Photos posted by a WeChat user who claims to have held hostage Nanchang’s top Evergrande representative.PHOTOS: WECHAT GROUPS Evergrande has more than 700 projects across 223 cities – most of which lie in the country’s less developed regions – and has committed to complete some 1.4 million properties by the end of June, according to the Times. Last week, over 100 people who had bought homes with Evergrande staged a protest in Guangzhou after construction stalled on the projects.
On Wednesday, state media Global Times sought to restore investor confidence, calling the company’s liquidity problems an “isolated incident,” and insisting that Evergrande’s debt crisis will “not affect China’s efforts to strengthen regulation of the housing market to prevent major financial risks and ensure sustainable development.”
As the Times further notes, however, Beijing has yet to make an official statement on what actions will be taken.
Tyler Durden
Thu, 09/16/2021 – 21:50 - Aussie Uranium Stocks Soar After Australia Decides It Wants Nuclear Industry To Go With New Nuclear Subs
Aussie Uranium Stocks Soar After Australia Decides It Wants Nuclear Industry To Go With New Nuclear Subs
Following last night “historic” AUKUS deal, which officially pitted US and UK with Australia against China, in the process supplying the aussies with nuclear-powered subs (while enraging the French whose $50 billion contract to build diesel-electric submarines was scrapped as a result), Australia has a revelation: the deal would see Australia become the only country in the world with nuclear-powered submarines to not have its own domestic nuclear industry. This in turn immediately led to further calls to reverse a longstanding ban on developing local uranium resources.
“Getting nuclear subs makes sense for our national defense,” said Queensland Nationals Senator Matt Canavan, who has been leading a push in parliament to develop Australia’s nuclear industry. “But no country in the world has nuclear subs without having nuclear power,” he said.
“I thought before the subs deal we should have nuclear power — it makes even more sense now.”
As Australia’s Daily Telegraph poignantly observes, France, which was previously to supply Australia with diesel subs assembled in Adelaide, has its own fleet of 10 nuclear attack and nuclear ballistic missile submarines, and derives more than 70% of its domestic energy needs from nuclear power. Of course, Russia and the US both have large nuclear-powered naval fleets, and derive about 20% of their respective domestic electricity from nuclear.
China, meanwhile, is continuing to develop its own nuclear-powered and nuclear-armed navy but only relies on atomic energy for 5% cent of its power, thanks to its lax environmental standards and reliance on coal-fired power.
As a result, local mining industry figures, said that this was the perfect time to reignite the discussion about nuclear.
“This is a perfect opportunity to update our approach to nuclear energy by removing the cold-war era ban on uranium mining in NSW. It’s a real chance to develop a new industry here in NSW that could provide local uranium to meet our domestic energy and national security needs,” NSW Mining CEO Stephen Galilee said.
Galilee’s thoughts were echoed by the Minerals Council of Australia’s Tania Constable, who said of the deal, “This is an incredible opportunity for Australia’s economy — not only will we develop the skills and infrastructure to support this naval technology, but it connects us to the growing global nuclear power industry and its supply chains.
But, she added, “Outdated regulations at the federal and state levels that prohibit nuclear power — and in some cases exploration and mining of uranium — contribute to Australia being unable to properly even consider, let alone develop, this important industry.”
Opposition Leader Anthony Albanese, however, kiboshed any thought of leveraging a domestic nuclear industry off the deal, saying that a condition for the ALP’s support was that “there be no requirement of a domestic civil nuclear industry”.
His objection, however, fell on deaf ears and overnight Australia’s uranium stocks soared on hopes that Australia was indeed set to finally enter the nuclear era. As a result Deep Yellow jumped as much as 10%, Paladin Energy soared as much as 9.3%, Defense contractor Austal shares climbs as much as 7.4%; the most since March and Peninsula Energy jumped at much as 17%.
Meanwhile, back in the US uranium stocks have continued their ascent as more investors focus on Sprott’s attempt to go “Hunt Brothers” on uranium with his Sprott Physical Uranium Trust which has been on a buying spree, bolstering its stockpile by 45% in four weeks after snapping up 8.1 million pounds of the commodity while prices soared. Uranium has surged 40% this month, putting pressure on utility owners and other users when supplies are dwindling and demand is set to take off thanks to more reactors being built around the world.
Discussing its strategy with Bloomberg, the Canadian firm behind the world’s only physical uranium fund said it wasn’t solely responsible for the move, but that hedge funds and family offices are driving up demand for the radioactive metal used to fuel nuclear reactors.
“I don’t think we’re crowding them out,” said John Ciampaglia, chief executive officer of Sprott Asset Management, which oversees the trust. “You’ve got end users that are trying to buy materials, you’ve got speculators and financial intermediaries in the market as well.”
Investment demand from non-utility buyers such as hedge funds and family offices has been strong this year, even before Sprott’s asset-management unit launched its trust on July 19, according to Ciampaglia. A few uranium development companies bought the physical commodity after raising equity in the capital markets rather than parking the proceeds into cash, he said.
Still, according to the latest data, Sprott’s trust holds about 26 million pounds of uranium, equal to about 14% of the annual consumption from the world’s nuclear reactors. The closed-end fund was formed out of an April takeover of Uranium Participation Corp., which held 18 million pounds of uranium, and its trust units trade on the Toronto Stock Exchange. The fund invests and holds substantially all of its assets in uranium, which is stored in highly secured facilities in Canada, France and the U.S.
Units of Sprott Physical Uranium Trust have soared 42% in September since our post “A Bitcoin-Like Opportunity In Uranium?”
Historically low prices and pandemic-driven mine disruptions have prompted uranium producers including Cameco to buy from the spot market to fulfill their long-term contracts with consumers. That means stockpiling by the Sprott fund may have the potential for tightening the market and boosting prices, in the process as prices rise, the value of the fund will rise as well, attracting more inflows, leading to even more uranium purchases, even higher prices and so on until we have another Hunt Brothers situation on our hands, only with uranium this time instead of silver.
The robust investment demand is built on a growing realization that nuclear power is becoming more accepted by policymakers worldwide as a way to limit greenhouse-gas emissions, Ciampaglia said Wednesday in an interview. Australia’s reaction was merely confirmation of this.
“That’s something that’s just recent, and you’re seeing this from the Biden administration acknowledging and providing support for nuclear,” he said. “And the European Union clearly identifies nuclear as part of the taxonomy.”
As Bloomberg adds, Uranium is also getting a boost from generalist investors who are seeking investments that meet environmental, social and governance criteria or support the energy shift away from fossil fuels, he said.
Then there’s the recent buzz from retail investors, with uranium becoming a recent target of the meme-stock frenzy that share tips on Reddit message boards. Cameco, the world’s second-largest uranium miner, was the most searched stock symbol on Monday, according to WallStreetBets Ticker Sentiment.
Reddit day-traders “seem to be into it,” Bloomberg Intelligence analyst Eric Balchunas said in an interview. “When you have something that’s starting to surge that’s been beaten for 10 years and there’s some more room to run potentially, I think that’s what they’re trying to do.”
Tyler Durden
Thu, 09/16/2021 – 21:30 - Taiwan FM Says The Island Is A "Sea Fortress" Blocking Chinese Expansion
Taiwan FM Says The Island Is A “Sea Fortress” Blocking Chinese Expansion
Authored by Dave DeCamp via AntiWar.com,
On Wednesday, Taiwanese Foreign Minister Joseph Wu told an online forum on US-Taiwan relations that Taiwan is a “sea fortress” blocking Chinese expansion in the region.
The forum was organized by the Global Taiwan Institute, and according to Reuters, several former US officials were in attendance. Wu said that Taiwan played a “significant role” in ensuring freedom of navigation in the Taiwan Strait and the South China Sea, two areas where the US military has stepped up its activity.
Via Reuters “A democratic Taiwan serves as a sea fortress to block China’s expansionism into the wider Pacific,” Wu said. Boosting ties with “democracies” is something the Biden administration has touted as a way to counter China, something Wu said Taiwan plays a role in.
“Taiwan has learned valuable lessons and developed various means to tackle the threat to democracy, and we are more than willing to share this knowledge with fellow democracies,” he said.
Wu’s comments come as Taiwan is holding military exercises simulating a Chinese invasion. The drills are simulating an attack that took out Taiwan’s airfields, so fighter jets are practicing landing on stretches of highway.
Taiwanese Air Force fighter jets park on a highway that is converted as a runway during the take-off and landing drill as part of the annual Han Kuang drill in Pingtung, Taiwan, 15 September 2021. pic.twitter.com/HvWtKk0d9r
— e-Αmyna (@e_amyna) September 15, 2021
https://platform.twitter.com/widgets.js
The Biden administration has continued the tradition of selling weapons to Taiwan and has been sailing warships through the sensitive Taiwan Strait just about every month. The latest US transit through the sensitive waterway was carried out by a US Navy warship and a US Coast Guard cutter.
The US and Taiwan have been holding talks on coast guard cooperation that could result in future joint exercises.
Tyler Durden
Thu, 09/16/2021 – 21:10 - Facebook Aided In Recruitment Of Modern Day Slaves, Cartel Hitmen Internal Documents Show
Facebook Aided In Recruitment Of Modern Day Slaves, Cartel Hitmen Internal Documents Show
It seems like the WSJ’s entire San Francisco bureau has been preoccupied lately with churning out a series of stories sourced from “leaked” internal Facebook documents exposing embarrassing internal reports on everything from Instagram’s deleterious impact on the mental health of its twentysomething and teenage users to political divisiveness to – today’s entry – how Facebook’s products are abused to facilitated human trafficking and terror recruitment in parts of the emerging world.
The gist of the piece is this: Facebook has a small staff dedicated to combating human trafficking around the world, particularly in countries where the rule of law isn’t as robust as it is in the US and Europe. In the Middle East, Facebook is used to lure women into sex slavery (or some other form of exploitative labor).
In Ethiopia, armed groups use the site to recruit and to incite violence against other ethnic minorities.
Facebook’s monitors have also sent reports to their bosses on everything from human organ trafficking, pornography and child pornography, and government’s cracking down on political dissent.
The documents leaked to WSJ show that while Facebook removes some pages, many continue to operate openly.
While some might sympathize with Facebook’s inability to whack every mole (after all, they’re fighting a never-ending torrent of misconduct). But the sad truth is that Facebook could do more to stop its platform from being abused by traffickers, criminals and abusers – particularly in the emerging world (we all remember what happened in Myanmar).
The reason it doesn’t is because that would be bad for business”, according to a former chief executive who resigned from the company last year. Facebook treats harm in developing countries as “simply the cost of doing business” in those places, said Brian Boland, a former Facebook vice president who oversaw partnerships with internet providers in Africa and Asia before resigning at the end of last year.
Facebook has focused its safety efforts on wealthier markets (like the US) where powerful government and media institutions can help keep it accountable. But in smaller countries, Facebook answers many problems with a shrug.
“There is very rarely a significant, concerted effort to invest in fixing those areas,” Boland said.
The problem for Facebook is that the developing world is now it’s biggest market for growth. With user numbers in the US, Canada and Europe mostly stagnant now, 90% of the company’s user growth is coming from the developing world.
A Facebook spokesman responded to WSJ’s inquiry by describing Facebook’s efforts to police content in the emerging world. “In countries at risk for conflict and violence, we have a comprehensive strategy, including relying on global teams with native speakers covering over 50 languages, educational resources, and partnerships with local experts and third-party fact checkers to keep people safe,” Facebook spokesman Andy Stone said this week.
Others say while this might be true, it’s not enough – and Facebook’s leadership knows it. One team, led by a former cop, uncovered how the New Jalisco Cartel in Mexico was using Facebook to recruit and train aspiring cartel hitmen.
On Jan. 13, nine days after employees circulated an internal report calling on Facebook to take down all pages publicly associated with the cartel, the first post appeared on a new CJNG Instagram account: it was a video of a person with a gold pistol shooting a young man in the head while blood spurts from his neck. The next post was a photo of a beaten man tied to a chair. The next one was a trash bag full of severed hands.
That page, along with other Instagram and Facebook pages advertising the cartel, remained active for at least five months before being taken down. Since then, new pages have appeared under the CJNG name featuring guns and beheadings.
In other instances, Facebook found that it simply didn’t have enough language specialists to monitor threats in certain emerging countries. One example was Ethiopia. Like years before in Myanmar, some Ethiopian users used Facebook to incite violence against the people of Tigray, attacks that have risen to the level of war crimes.
In what was perhaps one of the most shocking shortcomings, Facebook’s lack of Arabic-language experts allowed a scheme where “employment agencies” lured women from Kenya and other African nations to work as de facto slaves in the homes of wealthy Saudis. Most of these agencies advertised on Facebook to lure workers to an airport, where they would be confronted with a bait and switch, and told that, if they backed out now, they would be on the hook to repay the employment agency.
Tyler Durden
Thu, 09/16/2021 – 20:50 - China Braces For "Nightmare Scenario" As Evergrande Offers Broke Investors Discounted Apartments
China Braces For “Nightmare Scenario” As Evergrande Offers Broke Investors Discounted Apartments
Up until now the collapse of China’s Evergrande was very much a slow motion affair, captured perhaps best by Forte Securities trader Keith Temperton who said that “the Asian banks will get hit hard if there’s a default, but then there will be a 10-year recovery process. The market’s getting a hang of it. The way they’ve managed the news flow seems quite clever. They haven’t let a swathe of bad news at once.” But while Beijing was indeed successful in extending the period of collapse as long as possible, now that Evergrande is effectively insolvent and having suspended its bonds from trading we have finally gotten to the endgame and the realization that hundreds of billions in capital (Evergrande’s total debt was just over $300 billion) is gone for ever.
This realization has already prompted angry protesters at China Evergrande Group offices across the country as the developer has fallen further behind on promises to more than 70,000 investors. Construction of unfinished properties with enough floor space to cover three-fourths of Manhattan grinds to a halt, leaving more than a million homebuyers in limbo.
In an effort to appease its angry (and very soon, poor) stakeholders, Evergrande plans to let consumers and staff bid on discounted properties this month to repay them for billions in overdue investment products as the embattled developer seeks to preserve cash, according to people familiar with the matter.
According to Bloomberg, the company will organize an online property event by Sept. 30 for investors who opt for discounted real estate in lieu of cash, said two employees who were briefed on an internal call Thursday and asked not to be identified. The world’s most-indebted property developer is pushing the discounted real estate as the preferred of three options for angry investors seeking repayments.
The high-yield “shadow bank” products paying as much as 13% a year have become a lightning rod for cash-strapped Evergrande, with investors and staff protesting losses and delayed payments from investments that were marketed as safe. Indeed, demonstrations that are breaking out across China could sway any bailout decisions by the government, which places a high priority on social stability, although it’s likely too late for that.
More than 70,000 people bought the products, including many Evergrande employees, Bloomberg reported earlier, citing an executive of Evergrande’s wealth division. And with about 40 billion yuan ($6.2 billion) of them are now due according to Caixin, there is about to be a whole lot of angry investors, who will not be swayed by the company’s hail mary plan to offer steep discounts on property assets. Investors can invest in residential housing units at a 28% discount, offices at a 46% discount and stores and parking units at 52%. Discounted rates can’t be lower than price floors designated by local governments. The property discounts are a voluntary repayment option, according to the briefing.
And while we wait to see what the acceptance rate on this bizarre debt-for-apartments exchange offer will be, the reality of the absurd situation is finally seeping in and is pummeling China’s already shaky real estate market, where new land sales just crashed by 90% in August…
… in the process squeezing other developers and rippling through a supply chain that accounts for more than a quarter of Chinese economic output. And as fear of contagion and exposure to Evergrande has finally emerged, credit-market stress spreads from lower-rated property companies to stronger peers and banks as global investors who bought $527 billion of Chinese stocks and bonds in the 15 months through June begin to sell.
This, in turn, brings us to China’s nightmare scenario: an uncontrolled bankruptcy which escalates into an all out economic crash.
As Bloomberg notes, it’s impossible to know for sure what would happen if Beijing allows Evergrande’s downward spiral to continue unabated, but China watchers are already mapping out worst-case scenarios as they contemplate how much pain the Communist Party is willing to tolerate. Pressure to intervene is growing as signs of financial contagion increase and as more and more popular anger builds.
“As a systemically important developer, an Evergrande bankruptcy would cause problems for the entire property sector,” said Shen Meng, director at Beijing investment bank Chanson & Co. “Debt recovery efforts by creditors would lead to fire sales of assets and hit housing prices. Profit margins across the supply chain would be squeezed. It would also lead to panic selling in capital markets.”
Evergrande had 1.3 trillion yuan ($202 billion) in presale liabilities at the end of June, equivalent to about 1.4 million individual properties that it has committed to complete, according to a Capital Economics report last week. “If Evergrande had to dump its inventory onto the market” it would “drag down property prices substantially,” said Hao Hong, chief strategist at Bocom International.
Such an outcome would be catastrophic for China’s economy, where real estate represents 70% of household net worth, but absent a full-blown bailout by Beijing which would appear as glaring weakness coming so late into the process, it is unclear what other alternatives are viable even if Shen, and virtually all other analysts and investors discussing Evergrande say Beijing is in no mood for a Lehman moment. Instead, rather than allow a chaotic collapse into bankruptcy, they predict regulators will engineer a restructuring of Evergrande’s $300 billion pile of liabilities that keeps systemic risk to a minimum.
While markets seem to agree with the Shanghai Composite Index less than 3% from a six-year high and the yuan is near the strongest level in three months against the dollar, it is unclear just how Beijing – which did not allow corporate debt restructurings until a few years ago – will oversee a bankruptcy process that would be substantially bigger and more complicated than that of Lehman brothers.
Even Bloomberg agrees that “a benign outcome is far from assured” and reminds us of Beijing’s bungled stock-market rescue in 2015 which showed how difficult it can be for central planning policymakers to control financial outcomes, even in a system where the government runs most of the banks and can exert outsized pressure on creditors, suppliers and other counterparties.
And while equities continue to exist in a world of their own where nothing can go wrong, some parts of the market are starting to crask amid the surge in contagion risk: as noted in recent days, Chinese junk-bond yields jumped to an 18-month high and shares of real estate companies plunged after Evergrande had its credit rating downgraded and requested a trading halt in its onshore bonds. Furthermore, ahead of what many fear could become a cascading liquidity crisis, banks in China are hoarding yuan at the highest cost in almost four years, a sign they may be preparing for what a Mizuho Financial Group Inc. strategist called a “liquidity squeeze in crisis mode.”
With so much unclear, where Xi will ultimately draw the line to contain the fallout remains a mystery. While China’s top financial regulator has urged billionaire Evergrande founder Hui Ka Yan to solve his company’s debt problems, authorities have yet to spell out how they envision him backstopping hundreds of billions in liabilities, and even whether the government would allow a major debt restructuring or bankruptcy. Adding to the China’s recent deleveraging campaign would lose credibility
Even senior officials at state-owned banks have told Bloomberg that they’re confused and still waiting for guidance on a long-term solution from top leaders in Beijing. Evergrande’s main banks were told by China’s housing ministry this week that the developer won’t be able to make interest payments due Sept. 20.
To be sure, China’s government isn’t averse to nationalizing failed private companies: in 2019, Beijing seized Baoshang Bank and assumed control of HNA Group, the once-sprawling conglomerate in early 2020 after the coronavirus pandemic decimated the company’s main travel business. Court-led restructurings have also become more common in recent years, with more than 700 being completed in 2020.
Ultimately, rhe Evergrande endgame will depend largely on how Xi balances his goals of maintaining social and financial stability against his multi-year campaign to reduce moral hazard (spoiler alert: in a country of 1.4 billion people preventing social unrest will always win over moral hazard). Then again, the timing is particularly tricky as China juggles an economic slowdown, a sweeping crackdown on the private sector and rising tensions with Washington – all in the runup to a once-in-five-year leadership reshuffle in 2022 at which Xi is set to extend his indefinite rule.
So while some sort of rescue is likely, “the government has to be very, very careful in balancing support for Evergrande,” said Yu Yong, a former China Banking and Insurance Regulatory Commission regulator and now chief risk officer at China Agriculture Reinsurance Fund.
“Property is the biggest bubble that everyone has been talking about in China,” Yu told Everbright Sun Hung Kai analyst Jonas Short in a recent podcast. “So if anything happens, this could clearly cause systematic risk to the whole China economy.”
Courtesy of Bloomberg, here are some of the factors that may sway Chinese leaders:
Social Unrest – Maintaining social order has always been a key priority for the Communist Party, which has no tolerance for protests of any kind. In Guangzhou, homebuyers surrounded a local housing bureau last week to demand Evergrande restart stalled construction. Disgruntled retail investors have gathered at the company’s Shenzhen headquarters for at least three straight days this week, and videos of protests against the developer in other parts of China have been shared widely online (see video above). Without a social safety net and with limited places to put their money, Chinese savers have for years been encouraged to buy homes whose prices were only ever supposed to go up (similar to the US before 2007 when even idiots like Ben Bernanke said that the US housing market never goes down). Today, buying a house (or two) is a cultural touchstone. While housing affordability has become a hot topic in the West, many Chinese are more likely to protest falling home prices than spiking ones.
“Given that the bulk of people’s wealth is already in property, even a 10% correction would be a serious knock to many people,” said Fraser Howie, an independent analyst and co-author of books on Chinese finance who has been following the country’s corporate sector for decades. “It would certainly knock their hopes and dreams and expectations about what property is.”
Shadow banks: Another potential flashpoint is whether Evergrande can repay high-yield wealth management products that it sold to thousands of retail investors, including many of its own employees. About 40 billion yuan of the WMPs are due to be repaid, according to Caixin, a Chinese financial news service. Evergrande is trying to free up cash by selling assets, including stakes in its electric-car and property-management businesses, but has so far made little progress.
Capital Markets: Evergrande is the largest high-yield dollar bond issuer in China, accounting for 16% of outstanding notes, according to Bank of America. Should the company collapse, that alone would push the default rate on the country’s junk dollar bond market to 14% from 3%. While Beijing has become more comfortable with allowing weaker businesses to fail, an uncontrolled spike in offshore funding costs would risk derailing a key source of financing. It could also undermine global confidence in the country’s issuers at a time when Beijing is pushing for larger foreign investor ownership. Yields on China’s junk dollar bonds are nearing 14%, up from about 7.4% in February, according to a Bloomberg index, largely due to the crash in Evergrande debt.
The stakes are even higher on the mainland, where the yuan-denominated credit market is about 15 times the size at $12 trillion. While Evergrande is less of a whale onshore, a collapse could force banks to cut their holdings of corporate notes and even freeze money markets, the plumbing of China’s financial system. In such a credit crunch, the government or central bank would be forced to act. Banks involved in property lending may come under pressure, leading to an increase in soured loans. Smaller banks exposed to Evergrande or other weaker developers may face “significant” increases in non-performing loans in the event of a default, according to Fitch Ratings.
Economic Impact: Concern over Evergrande comes at a time when China’s economy is slowing sharply. Aggressive controls to curb outbreaks of Covid-19 are hurting retail spending and travel, while measures to cool property prices are taking a toll. Data this week showed home sales by value slumped 20% in August from a year earlier, the biggest drop since the onset of the coronavirus early last year. Responding to a question on Evergrande’s potential impact on the economy, National Bureau of Statistics spokesman Fu Linghui said some large property enterprises are running into difficulties and the fallout “remains to be seen.”
China’s current priorities of promoting “common prosperity” and deterring excessive risk-taking mean there’s unlikely to be any easing of property curbs this year, according to Macquarie Group Ltd. The sector will be a “main growth headwind” for next year, although policy makers may loosen restrictions to defend growth goals, Macquarie analysts wrote in a Wednesday note.
A crash in China’s property market would not only slow the domestic economy but have global consequences too.
“A significant slowdown in property construction over the next few years appears probable already, and would become even more likely in the event of an Evergrande failure or bankruptcy,” said Logan Wright, a Hong Kong-based director at research firm Rhodium Group LLC. “A long-term slowdown in property construction, an industry that represents around a fifth or a quarter of China’s economy by most estimates, would cause a significant decline in GDP growth, commodity demand, and would likely have disinflationary effects globally.”
* * *
The bottom line is that while stocks stubbornly refuse to reflect the huge risks faced by China in the coming days when Evergrande’s fate will be revealed, the reality is that a nightmare scenario – one which is all but assured absent a full-scale bailout by Beijing – would lead not only to a Chinese financial crisis and economic crisis, but to a global stagflationary depression because unlike the global financial crisis when it was China that dragged the world out of the depth of the crisis, this time it will be China responsible for the collapse and as much as they may try, developed nations simply do not have the debt-creating horsepower to pull the world out of the coming chasm
Tyler Durden
Thu, 09/16/2021 – 20:35 - States See Looming Monoclonal Antibody Crunch As Biden Admin Rations Doses
States See Looming Monoclonal Antibody Crunch As Biden Admin Rations Doses
Authored by Zachary Stieber via The Epoch Times,
Some states are set to receive fewer doses of monoclonal antibody treatments after the Biden administration switched the distribution system this week.
Demand for monoclonal antibodies, used to treat non-hospitalized COVID-19 patients, has shot up in recent weeks, leading to what some officials have described as a shortage.
The Biden administration tipped off states in early September that it was limiting distribution of the treatments before abruptly switching on Monday from letting sites directly order the doses to putting the federal government in charge of allocation to states, which can then choose where to send them.
Some state officials say they weren’t notified of the change until late Monday, and that pending orders with AmerisourceBergen, the primary distributor in the old model, were being closed out.
The Department of Health and Human Services (HHS) alerted Texas health officials “that the national supply has considerably decreased and states should expect lower amounts of therapeutics available for shipment in the coming weeks,” Douglas Loveday, press officer for the Texas Department of State Health Services, told The Epoch Times in an email.
“The amount available to distribute is expected to be disproportionately small compared to the amounts needed,” he added.
Other states have also been told they won’t get as many doses as they were getting before. Among them are southern states grappling with the worst COVID-19 outbreaks in the nation.
Dr. Scott Harris, Alabama’s top medical officer, said HHS recently called to “let us know that Alabama and some other states are going to be on an allocation.”
“We don’t think providers are going to be able to order as much as they would like,” he said during a briefing late last week. Up until the change, “there was really sort of no limit to what could be ordered,” he added.
HHS and the federal COVID-19 response team did not respond to requests for comment for this article.
HHS said in an update on Monday that the higher number of COVID-19 cases in the United States in recent weeks has “caused a substantial surge in the utilization of monoclonal antibody (mAb) drugs,” especially in parts of the country with low vaccination rates.
Federal officials informed state health officials that there’s been a 20-fold increase in demand for monoclonal antibodies in just the last few weeks, James Blumenstock, the chief of health security at the Association of State and Territorial Health Officials, told The Epoch Times.
“Clearly that’s outstripping the current supply even with the supply increase this month; that increase is not sufficient to meet the current demand,” he said.
The timeline for when supplies will increase enough to meet the jump in demand isn’t clear. The new process will help ensure consistent availability for the drugs in all parts of the nation, according to HHS, which is basing its weekly shipments based on reports of new COVID-19 cases and hospitalizations and inventory data.
Monoclonal antibody treatments from two companies, Regeneron and Eli Lilly, are purchased by the federal government and distributed across the nation. Patients get them for free. The treatments received emergency use authorization from drug regulators earlier in the COVID-19 pandemic. Clinical trials showed they reduced hospitalization or death by as much as 70 percent.
Dr. Aldo Calvo, medical director of family medicine at Broward Health, shows a Regeneron monoclonal antibody infusion bag during a news conference in Fort Lauderdale, Fla, on Aug. 19, 2021. (Joe Cavaretta/South Florida Sun-Sentinel via AP)
It takes several weeks or months to produce a batch of Regeneron’s drug, REGEN-COV, a spokesman for the New York-based company told The Epoch Times in an email. Regeneron says demand has grown since earlier this year but that it is ready to deliver new doses quickly because it “remained proactive” and has the drug in various stages of the manufacturing process.
An Eli Lilly spokesperson told The Epoch Times via email that the Indiana-based company “continues to work with governments globally to help address the therapeutic needs of patients during the COVID-19 pandemic.”
Another monoclonal antibody treatment, from GlaxoSmithKline, is not being distributed through the federal government. A spokesperson for the company, which is headquartered in the United Kingdom, told The Epoch Times in an email that there are no supply or access issues for its medicine.
The United States has purchased or committed to purchasing nearly three million doses of REGEN-COV, including 1.4 million doses on Sept. 14. Most of the doses cost taxpayers $2,100 each, according to the Regeneron spokesman. Eli Lilly’s treatment requires two drugs, etesevimab and bamlanivimab. The company just reached an agreement to provide 388,000 additional doses of etesevimab to the U.S. government for nearly $1,000 each, building on earlier contracts to supply nearly 1 million vials of one drug or the other.
Over 2.1 million monoclonal antibody doses were shipped to over 8,000 sites across the nation as of early September, John Redd, chief medical officer for HHS emergency preparedness and response office, told state officials in a recent call.
Redd told officials that HHS had not returned to the allocation model that was used between November 2020 and February. A few days later, the model was switched.
Biden’s administration also said last week in a fresh COVID-19 response plan that it would increase shipments of monoclonal antibodies to states by 50 percent in September—something critics are pointing to in questioning the change.
“It is regrettable that the Biden administration would play politics with people’s lives during a pandemic, by withholding a life-saving treatment and providing mixed messages to Americans,” Christina Pushaw, press secretary for Florida Gov. Ron DeSantis, told The Epoch Times via email.
“Today, I pressed President Biden’s team to explain the sudden rationing of these life-saving treatments—without any warning—after the administration urged us to promote them. It is yet another example of confusing and conflicting guidance coming from the federal government,” Maryland Gov. Larry Hogan wrote on social media.
Sen. Tommy Tuberville’s (R-Ala.) office told The Epoch Times in an email that it’s looking into the matter to see how it can be of assistance.
Florida has not yet seen its supply drop and some other states said they don’t expect the distribution model change to affect them.
“We do not have any concerns about monoclonal supply at this point of time in Arkansas based on current usage patterns,” Danyelle McNeill, a spokeswoman for the Arkansas Department of Health, told The Epoch Times in an email.
Some governors, including DeSantis, have heavily promoted monoclonal antibodies, which have a high efficacy rate against cases of COVID-19 that don’t require hospital care and are sometimes used following an exposure to a COVID-19 patient.
COVID-19 is the disease caused by the CCP (Chinese Communist Party) virus.
For now, officials are encouraging people to continue seeking out the antibody treatments. Some experts say the drop in supply should prompt people who haven’t received a COVID-19 vaccine to get one.
“The public health message is, while everyone is doing their absolute best to treat and care for individuals who get sick from COVID, the best effort is to avoid that scenario in the first place, and therefore get vaccinated,” Blumenstock said.
And of course Psaki denies any rationing… then admits it…
She states it’s not accurate and then goes on to say why the admin is doing it. https://t.co/V5h1eEBiJe
— Stephen L. Miller (@redsteeze) September 16, 2021
Tyler Durden
Thu, 09/16/2021 – 20:30 - US Pork Exports To Dominican Republic Spike Amid Pig Ebola Outbreak
US Pork Exports To Dominican Republic Spike Amid Pig Ebola Outbreak
The first outbreak of African Swine Fever (ASF) in the Western Hemisphere in four decades began on July 28 in the Dominican Republic and was confirmed by the United States Department of Agriculture (USDA).
The presence of ASF has led to massive hog culling on the Caribbean island that borders Haiti. Bloomberg notes the island may have to slaughter more than half a million pigs to prevent the deadly swine fever virus from spreading.
Pork supplies are dwindling, and Dominican importers are panic buying from U.S. slaughterhouses. The latest USDA data shows U.S. exporters shipped a whopping 3,500 metric tons of pork to the Caribbean nation earlier this month – the highest on record.
Steve Meyer, an economist at Partners For Production Agriculture based in Ames, Iowa, said during a previous ASF outbreak in the 1970s, the Dominican Republic ramped up pork supplies from the U.S.
“Exporting pork to there would be easier now as more companies are set up” to do it, Meyer said.
The U.S. has taken pre-emptive measures to suppress the outbreak by creating a “protection zone” around Puerto Rico and the U.S. Virgin Islands.
“USDA is committed to assisting the Dominican Republic in dealing with ASF, is offering continued testing support, and will consult with them on additional steps or actions to support response and mitigation measures,” USDA’s Animal and Plant Health Inspection Service said. “We will also offer similar help to Haiti, which borders the Dominican Republic and is at high risk for ASF detections.”
ASF outbreaks have ravaged hog populations in parts of Asia and Europe over the last several years. There is no vaccine against the virus, and outbreaks are usually contained by culling herds. This will only push up pork prices and drive food inflation higher – thus irritating consumers.
Tyler Durden
Thu, 09/16/2021 – 20:10 - This Is The Most Terrifying Map In The World… Here's What It Means For You
This Is The Most Terrifying Map In The World… Here’s What It Means For You
Authored by Chris Macintosh via InternationalMan.com,
If there ever was a time when you could see a trend solidly in motion, now is it.
That the Western, previously civilized world is in decline has been known to anyone with an ounce of curiosity and little analysis of data points.
Before Xi’s ascension to power one could have argued that this trend was worrying, but not terrifying.
What makes it terrifying is that Xi managed to abolish the two-term limit for his presidency with an overwhelming majority (2,959 to 2 and 3 abstaining votes – no prizes for guessing where those 5 guys are now).
He then proceeded to have his name enshrined in the constitution. Seriously.
You may recall Xi’s “anti-corruption” purge from a few years back.
Well, this was Xi’s own internal secret police, designed to kill (literally) any opposition from within the CCP (Chinese Communist Party).
Today’s China, or should I say CCP, is not the same CCP of Deng Xiaoping. Today’s CCP is an ideological global weapon of control, and it is spreading like a cancer.
Which brings me to…
To Tech, or Not to Tech?
Sometimes knowing where not to be is just as important as knowing where to be since all investments are a matter of opportunity costs and probabilities.
The implosion of Chinese tech continues.
One can argue as to what the particular catalyst for this selloff was. Certainly, the CCP going after Didi (China’s clone of Uber) hasn’t helped things, though this is peculiar to me. Because, when Jack Ma fell afoul of the CCP and disappeared (still yet to be seen) with Ant financial now a wholly owned subsidiary of the CCP, it was clear that Xi was implementing his three Cs: control, consolidate, continue.
It really is just nationalisation of resources with a carefully constructed veneer to pretend it really isn’t that at all. But that’s all it is — a veneer.
Truth is, much of the world works like this, including Putin’s Russia. China is moving towards controlling the key industry sectors (not that they didn’t have significant control before because they did) with less pretentiousness than before. Why?
The same reason they took Hong Kong. Because they could. And they could because the rest of the world is distracted, ironically by the Covid pantomime created by Fauci, Gates, Klaus, and their fellow technocrats.
All of this allows the CCP to do things they had not previously been able to do without repercussions, both politically and economically.
So now we have this gap between QQQ (US tech) and CQQQ (China tech), and the ratio between the two tech ETFs closed at another all-time low.
The Chinese tech regulatory issue has been going on for months, but the big question here is what is priced in.
What about the longer-term view? Is US tech any better?
US tech manipulates and owns the government whereas in China the government manipulates and owns China tech.
US investors have been buying up China tech as if it’s the same as US tech. Clearly it isn’t.
But the other question that is worth thinking about is what the US tech investors don’t know about the US tech? Do they still or should they still trust them to the extent that they do?
Well, you probably guessed my answer to that, but really what I think doesn’t matter because what the market thinks is what matters, at least for now.
Right now, the debate by the dolly birds on CNBC is around whether or not to buy these now cheaper Chinese tech stocks.
I would say a better question is if you can’t trust Chinese tech (and you clearly can’t), then pray tell, why would one trust US tech?
Do you chase US tech (like everybody else), puke Chinese tech (like everybody else), or start looking at the contrarian spread?
We are still a long way off buying China tech here as I don’t like putting out fires with my face… and that is what I think you’d be doing here. But buying US tech feels decidedly dicey as well.
So what do we do with all this?
We watch and see where these capital flows may go, and for now, we buy deep value.
* * *
The 2020s will likely to be an increasingly volatile decade. More governments are putting their money printing on overdrive. Negative interests are becoming the rule instead of the exception to it. One thing is for sure, there will be a great deal of change taking place in the years ahead. That’s precisely why legendary speculator Doug Casey and his team released an urgent new report titled Doug Casey’s Top 7 Predictions.
Tyler Durden
Thu, 09/16/2021 – 19:50 - Beijing Creates New Securities "Regulator" To Fight Fraud, Reassure Investors
Beijing Creates New Securities “Regulator” To Fight Fraud, Reassure Investors
With China’s bankrupt real-estate behemoth Evergrande finally on the verge of its “Lehman” moment, President Xi and the Politburo’s campaign to realign the Chinese economy with their “common prosperity” values has finally arrived at a reform of Chinese financial markets – which the CCP hopes will soon be booming with more domestic IPOs as foreign offerings have now been effectively banned during the crackdown.
According to Reuters, “China has set up a cross-agency team, led by the country’s securties watchdog, to coordinate crackdown efforts against illegal acticities in capital markets.”
The China Securities Regulatory Commission said on Thursday it recently led its first meeting with representatives from the other agencies as well as people from Beijing’s propaganda department, supreme court, supreme procuratorate, police, ministry of justice and ministry of finance.
The notion of Beijing tightening “oversight” of its financial markets is redolent of the spring and summer of 2015, when the government threatened to arrest short sellers and leaned on major securities firms to help out the official TTP with arresting a selloff in Chinese markets.
But according to Reuters, the focus of the new multi-party regulatory commission will be to ferret out “misbehavior” like securities fraud, book cooking, market-manipulation and insider trading with a “zero tolerance” ‘approach.
However, shortsellers might want to start thinking about the point at which selling Chinese stocks short becomes “manipulation” in the eyes of the authorities, especially as shares of major Chinese developers are getting hammered in Hong Kong and elsewhere.
Additionally, the team will “promote better coodination between the central and local governments,” as well as between varous Chinese regions, to better regulate its domestic capital markets.
Given Beijing’s hopes of building up its domestic capital markets (a policy President Xi has decided to impose by force), it’s not surprising that they’re beefing up “enforcement”, especially given Chinese companies’ reputation for fraud (think Luckin Coffee). Beijing has said it’s trying to channel more household savings into equities and bonds to “fund innovation and economic expansion” (even as the Evergrande debacle is creating mobs of angry home buyers and employees who lent money to Evergrande have been treated to a rude awakening).
In fact, it’s this very reputation for misbehavior by Chinese companies listed in the US that has led Congress and the SEC to deliver an ultimatum: either submit to tighter auditing standards, or be forcibly de-listed.
And looming over all of this is Evergrande, and the dismal prospect of contagion spreading across the Chinese economy and markets.
Tyler Durden
Thu, 09/16/2021 – 19:30 - Pentagon Paid Defense Contractors At Least $4.4 Trillion Since 9/11
Pentagon Paid Defense Contractors At Least $4.4 Trillion Since 9/11
Authored by Dave DeCamp via AntiWar.com,
Brown University’s Costs of War Project released a new report Monday detailing post-9/11 spending by the Pentagon. The study found that of the over $14 trillion spent by the Pentagon since the start of the war in Afghanistan, one-third to one-half went to private military contractors.
The report, authored by William Hartung of the Center for International Policy, said $4.4 trillion of the total spending went towards weapons procurement and research and development, a category that directly benefits corporate military contractors. Private contractors are also paid through other funds, like operations and maintenance, but those numbers are harder to determine.
Out of the $4.4 trillion, the top five US weapons makers — Lockheed Martin, Boeing, General Dynamics, Raytheon, and Northrop Grumman — received $2.2 trillion, almost half.
To put these huge numbers into perspective, the report pointed out that in the 2020 fiscal year, Lockheed Martin received $75 billion in Pentagon contracts, compared to the combined $44 billion budget for the State Department and USAID that same year.
Besides getting paid for weapons and research, US corporations profit from private contractors that are deployed to warzones. The most notorious private security contractor previously employed by the Pentagon is Blackwater, the mercenary group whose employees massacred 17 people in Iraq’s Nisour Square back in 2007.
Besides armed mercenaries, the Pentagon employed private contractors for just about every task in US warzones. Demonstrating the Pentagon’s reliance on contractors, at the end of the Trump administration, only 2,500 US troops were left in Afghanistan, but over 18,000 Pentagon contractors were still in the country.
Ranking of the top 20 US Department of Defense contractors in fiscal year 2019, by contract value (in billion of US dollars)…
You will find more infographics at Statista
The report explained how China is the new justification for military spending. “The most likely impact of the shift towards China will be to further tighten the grip of major weapons makers like Northrop Grumman, Lockheed Martin, General Dynamics, and Raytheon Technologies on the Pentagon budget,” the report reads.
Tyler Durden
Thu, 09/16/2021 – 19:10 - Gangs Of LA Sheriff's Deputies Are Running Amok, Bullying Other Cops
Gangs Of LA Sheriff’s Deputies Are Running Amok, Bullying Other Cops
The Los Angeles Sheriff’s Department is a massive law enforcement agency – it’s responsible for policing 153 unincorporated communities and 42 cities across a sizable patch of southern LA County – but it doesn’t get nearly as much attention as its neighboring agency, the LAPD, which patrols the City of Los Angeles. Unfortunately for the criminals who wind up in the agency’s crosshairs, this lower profile has helped a culture of gang-like fraternities to flourish across the organization that officially are referred to as “secret cliques” or “subgroups”, but in reality, they’re just gangs.
You know how some people say the police are just the biggest gang? Well, in this case, that’s not too far from the truth. According to a recently released report from the RAND Corporation, the county government has singled out at least four gangs with names like “the Banditos” and “the Executioners”.
Of the roughly 10,000 sworn personnel in the LASD, roughly one-sixth could be members of these gangs (though the actual figure is probably higher given the source). The “subgroups” have pervasive initiation rituals, tattoos, hand signs. Oftentimes, new members are required to violently assault people in custody. Since 1990, the county has paid out nearly $55MM in “subgroup related judgments” including $21MM in the last decade alone.
Still, it’s important to take the complaints with a grain of salt, as RAND even notes in its report that most of the “sub groups” are merely drinking organizations.
In a comment that appears to come from a fellow deputy, the individual says that if these organizations don’t constitute criminal gangs, then they’re close to it.
“I can’t say whether the Regulators or Vikings or Banditos are a criminal street gang, but they’re close to it,” said one survey respondent who identified obliquely as a “county stakeholder representative.” This person continued: “The reason you can’t answer that is that it’s never been investigated…The culture is so pervasive within the department. There are many people who are in places of management that may have been part of the same cliques, or precursors of them.”
One group in particular has been singled out for its bad behavior.
Some complained that the gangs are a threat to other deputies.
The Banditos are a menace to their non-clique colleagues – the report describes “alleged workplace harassment, incivility, intimidation, and retaliation, leading to ‘brawls in the parking lot.'”
Almost as troubling, the RAND report claims the Banditos have used violence against inmates in LASD custody as an initiation rite, requiring initiate deputies to use “unnecessary force” before they can receive the clique’s tattoo — a skeleton in a Sombrero holding a revolver.
“So you have a kid who wants to be accepted, they would ask are you ready to get your ink? And that meant you had to get into a use-of-force and send an inmate to the hospital, sometimes by breaking the orbital bone.”
Oftentimes, supervisors will cover for the deputies when it comes to documenting the use of force allegations.
Sheriff Villanueva has claimed to have cleaned house, but the RAND report contradicts these claims.
Members of the LA County board of supervisors responded to the report with the usual platitudes, and hollow commitments to end the “stranglehold” of the LASD’s gangs. Who knows? Maybe this time will be different?
Read the full report below:
Rand Rra616 1 by Joseph Adinolfi Jr. on Scribd
Tyler Durden
Thu, 09/16/2021 – 18:50
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